University of Arizona v. Pima County
| Decision Date | 16 January 1986 |
| Docket Number | No. 2,CA-SA,2 |
| Citation | 150 Ariz. 184,722 P.2d 352 |
| Parties | , 34 Ed. Law Rep. 280 UNIVERSITY of ARIZONA, an agency of the State of Arizona; Arizona Board of Regents, an agency of the State of Arizona, Petitioners, v. The Superior Court of the State of Arizona, in and for the COUNTY of PIMA, the Honorable Lawrence H. Fleischman, Judge of the Superior Court of the State of Arizona, in and for the County of Pima, Respondents, and Ben LINDSEY and Jeri Lindsey, husband and wife, Real Parties in Interest. 0337. |
| Court | Arizona Court of Appeals |
Petitioners have brought this special action from the trial court's denial of a motion for summary judgment which would, in effect, terminate litigation brought against them by the former University of Arizona men's basketball coach, Ben Lindsey. Petitioners' motion was based on alternative grounds: (1) the parol evidence rule bars the real party in interest's claim of a multi-year employment contract which conflicts with his written employment agreement, and (2) the alleged unconditional employment contract for more than one year is void and unenforceable under A.R.S. § 35-154. Were only the parol evidence rule argument advanced, this court would have declined jurisdiction since, in our view, allegations in the complaint, supported by deposition and affidavit, raise factual issues precluding summary judgment. However, we believe the application of A.R.S. § 35-154 is a matter of important public interest justifying the acceptance of jurisdiction. See University of Arizona Health Sciences Center v. Superior Court, 136 Ariz. 579, 667 P.2d 1294 (1983).
The facts necessary for our discussion of this issue are that in March 1982 Dave Strack, then athletic director of the University of Arizona, at the request of the then president of the University, Dr. John Schaefer, offered Lindsey a position as men's basketball coach. According to Lindsey, when he interviewed for the position two months earlier, he inquired as to how long it would take to rebuild the program and was told the new coach would have four years to do so. Lindsey alleges that Strack told him that, although the appointment for all professors and coaches at the University was for a one-year term, he would have the normal "four years" to demonstrate his ability as head coach and his contract would be resubmitted annually for reappointment for a minimum of four years. In his deposition, Schaefer has verified Lindsey's allegations as to the four-year promise and admits that he gave express authority to Strack to make this commitment to Lindsey.
After Lindsey was hired, the University through Strack reaffirmed its commitment to him that the contract would be resubmitted to the Board of Regents for a minimum of four years to allow Lindsey the opportunity to rebuild the basketball program. However, on April 21, 1983, Lindsey was notified by Cedric Dempsey, the new athletic director, that his contract would not be submitted for renewal. Lindsey brought suit against the University of Arizona and the Board of Regents, along with various individuals connected with his hiring and subsequent termination, alleging breach of contract, fraud, intentional interference with advantageous business relationship, and intentional infliction of emotional distress. The defendants moved for summary judgment on all counts, and the respondent court granted the motion except for Lindsey's breach of contract and fraud counts against petitioners.
Petitioners argue that, since the alleged contract with Lindsey was for more than one year, it violated the terms of A.R.S. § 35-154 and is therefore void and unenforceable. That section reads:
"Unauthorized obligations; effect; liability
A. No person shall incur, order or vote for the incurrence of any obligation against the state or for any expenditure not authorized by an appropriation and an allotment. Any obligation incurred in contravention of this chapter shall not be binding upon the state and shall be null and void and incapable of ratification by any executive authority to give effect thereto against the state.
B. Every person incurring, or ordering or voting for the incurrence of such obligations, and his bondsmen, shall be jointly and severally liable therefor. Every payment made in violation of the provisions of this chapter shall be deemed illegal, and every official authorizing or approving such payment, or taking part therein, and every person receiving such payment, or any part thereof, shall be jointly and severally liable to the state for the full amount so paid or received."
While it has been commonly thought that this statute precludes employment contracts of longer than one year's duration, we do not believe a reading of the statute and applicable case law supports that conclusion. In our view the statute simply provides the state a mechanism to avoid liability when the legislature chooses, for financial reasons, to do so.
In Duff v. Jordan, 82 Ariz. 228, 311 P.2d 829 (1957), our supreme court was faced with a case in which the Department of Transportation had contracted to pay $1,983,659 for a specified road improvement when the legislature had appropriated only $1,475,000. The state auditor refused to pay the first bill for construction, basing her refusal on § 35-154, considering the obligation "illegal." The court found that that section prohibited "the incurrence of an obligation for an expenditure not authorized by an appropriation and an allotment." 82 Ariz. at 231, 311 P.2d at 832. The court stated:
"Clearly, the petitioners cannot create an obligation for the fiscal year involved in excess of the unencumbered balance budgeted for the project.... [The contract] also stipulated that in the event no funds are appropriated or budgeted for the succeeding fiscal year the contract shall be null and void except as to the portion for which funds have now been appropriated and budgeted.
... in effect, the petitioners obligated the state to pay at the unit prices for work performed to the extent that there were funds...
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